VWRL - why the sharp(ish) fall last week?

[OLTB]

Hello all - basic question I hope...

In my passive portfolio, I have a fair size in VWRL and (I assume) that owing to the tick-up in strength for sterling last week because of the news that interest rates may be on the increase, the price of VWRL fell.

As this is a GBP fund, would that be because the main constituents are US companies and therefore valued in dollars or is that too simplistic? I'm not going to tinker with the fund, but just want to understand how it might be affected by these type of changes.

Cheers, OLTB.

[hiriskpaul]

Hello all - basic question I hope...

In my passive portfolio, I have a fair size in VWRL and (I assume) that owing to the tick-up in strength for sterling last week because of the news that interest rates may be on the increase, the price of VWRL fell.

As this is a GBP fund, would that be because the main constituents are US companies and therefore valued in dollars or is that too simplistic? I'm not going to tinker with the fund, but just want to understand how it might be affected by these type of changes.

Cheers, OLTB.

Friday to Friday close, VWRL (GBP denominated) dropped 2.2%, but the NAV (expressed in US$) dropped only 1.2%, so yes quite a lot of the drop was due to the rise in the value of the pound. This is not just because of the large number of US companies in the index though. The FTSE 100 also dropped, partially because around 75% of earnings are made in foreign currencies, so those earnings are worth less when converted to pounds.